An Analytical Review of Different Concepts of Riba (Interest) in the Sub-Continent

Authors

  • Farooq Aziz
  • Dr. Muhammad Mahmud
  • Emad Ul Kareem

Keywords:

Riba, Interest, Rent, Share Cropping

Abstract

The traditional concept of Riba (interest) is an excess amount on a loan, which the creditor receives from
the debtor on the repayment of a loan. There is almost a consensus on the spirit of this concept that it is
traditional thought or school; but along with that some other points of view also exists, which present
Riba, in somewhat different ways, will be termed as a non-traditional approach in this paper. Both of
these schools are agreed on the point that, Riba is just restricted to debt, and the increment on it is
Riba; but the main difference among these is that: former approach claims that each and every addition
on loan, regardless of purpose and time duration of the loan is Riba; but, the latter approach demand’s some
room for that on different grounds. Actually, both of them do not have any sound base. When the concept
of unearned income (the income, which is not the result of human labor), is a recognized fact in Islamic
economics in different forms, like ijara (rent), Mudoraba, and Mazara’a (Share Cropping); then
definitely no logical reason is left to avoid excess income on loan. Both approaches are just unable to
give a concrete concept of Riba.

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Published

31-12-2008